How payment preferences are shifting this holiday season
Discover how people are spending in the run-up to Christmas – and what businesses can do to adapt to increasingly digital-first shopping behaviors.
Holiday shopping trends: How payment preferences are shifting
With the holiday shopping season in full swing, data on spending habits is already emerging. The good news for businesses: despite concerns around the rising cost of living, consumer spending is set to increase year-on-year.
In the U.S., holiday spending is expected to increase by 7.9% this year, with consumers under the age of 45 planning to spend the most. In the U.K., retail sales are also forecast to rise, with almost two-thirds of shoppers intending to spend the same amount or more compared to last year.
Initial data released by Adobe and Salesforce tells a positive story. In the U.S., online sales on Black Friday reached $10.8 billion, up 10.2% over last year. Globally, online sales grew by 6% during Cyber Week, the period following Black Friday.
The businesses capitalizing on the growth in seasonal spending are those that understand spending behavior and payment preferences. Here, we explore how purchasing patterns have changed this year – and how forward-thinking businesses can cater to evolving consumer needs.
The growth of online shopping
Holiday shoppers are increasingly going online to buy goods and services. According to reports, online sales in the U.S. jumped by 14.6% on Black Friday compared to the previous year, while in-store sales rose by a modest 0.7%. Moreover, in-store footfall was down 2.3% the week of Black Friday, with more consumers opting to shop from the comfort of their homes.
For businesses, this shift underscores the importance of a robust digital strategy, with shoppers turning to websites, apps, and social media commerce to compare prices and snag the best deals.
Future-focused retailers are responding to this trend by building responsive websites and apps while investing in digital marketing to attract a large online audience. Many also offer inclusive payment options like PaysafeCard, so customers who prefer to pay in cash can easily purchase online.
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Mobile payments outpace desktop
More than half of online purchases now take place on smartphones. On Cyber Monday, 57% of sales came from mobile devices – a 13.3% year-over-year increase.
This growth correlates with the rising popularity of mobile-friendly payment options, like digital wallets, that let consumers pay securely with a tap of their phone. Research by Paysafe found that 32% of consumers are using digital wallets more often in 2024 because of their speed and convenience.
However, mobile commerce isn’t without challenges – on average, mobile conversion rates still lag behind desktop. To boost conversions, businesses must provide a seamless mobile shopping experience that supports digital wallets like Skrill.
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BNPL fuels spending sprees
From tech to travel, consumers are increasingly funding their purchases through buy now, pay later (BNPL) – short-term financing that lets customers make an upfront payment and pay off the rest in instalments.
The use of BNPL is expected to grow by 11.4% compared with 2023’s holiday shopping season, following continued growth throughout 2024. Much of this growth is driven by younger generations, with Gen Z forecast to become the largest generation of BNPL users by 2028.
While some critics claim BNPL leads to unsustainable debt, others argue it democratizes credit and helps consumers budget. For businesses, this payment method offers an opportunity to increase average order value, with customers able to buy high-ticket items they may have hesitated to pay upfront.
How Paysafe powers seasonal sales
Thousands of businesses rely on Paysafe to help them process soaring transaction volumes over the festive season. Here are some of the reasons why.
- Diverse payment methods: Paysafe’s all-in-one integration unlocks 260 payment methods and 40+ currencies. From digital wallets and card payments to eCash and local payment options, our platform accommodates a variety of preferences.
- Powerful data capabilities: Offer personalized promotions and recommendations to holiday shoppers with access to detailed reporting and analytics. Paysafe gives you the insights to craft tailored shopping experiences, fostering deep customer loyalty that extends beyond the holiday season.
- Enhanced fraud detection: Paysafe's advanced fraud detection tools strike the ideal balance between security and speed. Our AI-powered authentication systems ensure a smooth customer experience without compromising on fraud prevention or regulatory requirements.
- 24/7 customer support: During the peak holiday season, Paysafe’s team is readily available through multiple communication channels. Support staff equipped to handle high volumes of inquiries ensure timely resolutions for merchants and consumers alike.
- A two-sided network: As a payments provider serving both sides of the network – businesses and consumers – Paysafe runs initiatives that drive shoppers to spend more with our merchants. For example, we’re now offering PaysafeCard customers limited-edition holiday-themed cards, which make for a popular festive gift.
